We’ve Notched Some Wins, Will Face More Hurdles

With the window for commenting on the EPA's proposed 2014 renewable volume obligations closing in just days, Big Oil is fighting hard against ethanol. We still face a tough fight with some regulators and Congress this year, but we will win.
By Tom Buis | January 23, 2014

2013 was a very interesting year. Starting out, the potential for a good year was grim. We had just come out of a tough 2012 where we experienced the worst drought in decades, negative margins for the longest period ever, declining exports, very high ethanol stocks and declining consumption of fuel domestically. The economic picture changed dramatically, however, beginning late in the first quarter. Ethanol supply and demand achieved a better equilibrium, farmers planted a record corn crop and fuel consumption increased as gasoline prices declined. We also witnessed increased export demand. The end result was a very good year economically for our industry.   

While 2013 was a good year economically for ethanol, the policy challenges were a mixed bag. We witnessed the huge resources of Big Oil, and Big Food put a full court press on Congress to repeal the renewable fuels standard (RFS). A multimillion dollar campaign was launched by our critics blaming ethanol for everything imaginable—from driving up gas prices, destroying the environment to causing world hunger. None of it was true, but Big Oil and large multinational livestock and poultry companies used every trick in the book to blame ethanol. National TV and newspaper ads, op-eds, press conferences—they tried it all. They even tried to blame ethanol for a shortage of chicken wings during the Super Bowl. While none of the critics’ claims were based on facts, it did have an impact.  

First, the critics’ attempts to repeal the RFS in Congress were rebuffed when we had the opportunity to present the facts to Congress. The House Energy and Commerce Committee, which is dominated by oil interests and other critics of the RFS, failed to take action, which resulted in a huge win for ethanol and other biofuels. The law was not changed.  

While it was a huge victory in Congress, we were dealt a devastating blow by the U.S. EPA, which proposed to cut the volumes for 2014 mandated by the RFS. Nobody saw this one coming. Spooked by Big Oil’s false claim that higher RIN (renewable identification number) prices would result in big price increases to motorists, the administration basically bought Big Oil’s line and proposed drastic changes for 2014.

Though the suggested EPA rule caught us by surprise, we were able to quickly fight back. We testified in formal hearings and, with your support, were able to rally a huge number of responses from farmers, producers and consumers like you, who all felt it was important that the EPA and the Obama administration understand the importance of keeping the RFS statutory requirements in place. Our combined efforts were truly amazing!

In late January, the comment period for the EPA ended, and we now await the final rule to be announced later this year. We are confident that the EPA will recognize that changing the RFS will negatively impact our nation. As we all know, the unaltered RFS is a win for all Americans. It reduces our dependence on foreign oil, improves our environment, revitalizes our rural economy, and saves consumers money at the pump.

Our industry is a modern success story—one unrivaled in our nation’s history regarding energy production. This is why Big Oil is fighting so hard against ethanol; they know we can produce an alternative fuel that is cheaper, cleaner and better for our nation. Though we still face a tough fight with some regulators and Congress throughout the next year, we will win. Stay informed and involved about the latest issues the ethanol industry faces and our future successes at GrowthEnergy.org. Together, we will continue to grow this amazing fuel, and keep our nation moving forward.

Author: Tom Buis
CEO, Growth Energy